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KBR Receives Ammonia Plant Contract

Zacks Equity Research

KBR Inc. (KBR) recently received a contract from Dyno Nobel, a US-based business of Incitec Pivot Limited, to provide engineering, procurement and construction (:EPC) services for an ammonia plant to be built in Waggaman, La. In addition, the contract also includes that KBR will be providing technology licensing and equipment for the same plant.

The facility having a capacity of producing 800,000 metric tons of ammonia annually will be deploying KBR’s trusted and tested PurifierTM technology. This technology will help the facility to operate with lowest energy consumption. The contract is worth $600 million.

In addition, this contract confirms the fact that KBR is a trusted leader in the ammonia plant technology. Recently, in order to strengthen its position in ammonia processing, the company formed a new technology alliance with Yokogawa Electric Corporation for a fertilizer automation package.

The strategic tie-up is expected to combine KBR’s ammonia process technology expertise with Yokogawa's high value-added process control solutions to streamline the work process, develop standard configurations and simplify interfaces between various customers and suppliers.

Since the technology alliance, the contract from Dyno Nobel is the second contract. Prior to this KBR won a turnaround services contract from a leading supplier of agricultural products. The scope of the contract involves providing turnaround services for the agricultural company’s ammonia furnace revamp and supporting expansion project in Borger, Texas. The proposed plant turnaround services are expected to increase efficiencies and operational life of the furnace that will be designed by KBR.

KBR currently holds a Zacks Rank #3 (Hold). Other stocks worth a look in the services sector are Chicago Bridge & Iron (CBI), AECOM Technology Corporation (ACM) and Jacobs Engineering Group Inc. (JEC); all having a Zacks Rank #2 (Buy).

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